The Battle over Spectrum
FCC chair Julius Genachowski
The spectrum crunch is real," FCC chair Julius Genachowski told The Charlotte Observer during a recent visit to North Carolina's Research Triangle. Genachowski has been making the rounds to promote the administration's National Broadband Plan, which would create a robust nation-wide infrastructure, largely to support the burgeoning mobile industry. The National Broadband Plan is aimed at making the U.S. competitive with the many other countries that already have ubiquitous mobile broadband services.
Why should you care? For most people producing creative content, the tussle over spectrum is not in the foreground. If you've been especially busy, you may not have heard about it at all. It's time to get up to speed. Everyone in our industry--people who make their living writing, directing, producing, shooting, animating content-- needs to understand how the battle for spectrum is poised to change--inexorably and dramatically--the landscape for consuming, and therefore creating and marketing, content.
I come to this topic from a multi-faceted perspective. As a journalist, I've covered the TV broadcast industry for close to 25 years. About four years ago, I saw that the mobile platform was poised to become a major player, and founded MobilizedTV, an online newsletter focusing on the intersection of Hollywood and mobile. As I said, there, "If you're involved in the "traditional" media world of TV and film, decisions being made by the FCC, pushed by the Consumer Electronics Association and telcos, and fought by the National Association of Broadcasters, are about to bring very big changes to the world of media as we've known it so far."
Cable head end, South Brooklyn. ©Jim Henderson
ARE BROADCASTERS "SPECTRUM HOGS?"First, some background: broadcast -- or over-the-air (OTA) -- television was codified with the NTSC broadcast standard in 1953 and, with the exception of the addition of color, developed without change until the advent of digital. The transition to digital was an exceptionally long arc, including nearly two decades of developing an ATSC standard. Now digital, TV stations can multicast-- that is, split their signal into more than one station, and/ or provide High Definition TV services.
At the same time that the TV industry was evolving from analog to digital, the wireless industry began to establish itself. In three decades, Gordon Gecko's clunky cell phone of the 1970s became the sleek, multitasking Apple iPhone and the Samsung Galaxy Tab. In short order, the cell phone became ubiquitous; CTIA, the International Association for the Wireless Industry, reports that, as of June 2010, 292.8 million Americans are mobile subscribers, representing 93 percent of the total population.
The radio spectrum that both the broadcast and wireless industries depend on, however, is a limited asset. As cell phones have progressed from ringtones and wallpaper (1G or first generation) to multimedia devices, capable of playing and shooting HD video and music, browsing the internet and many other tasks, the wireless network is strained over capacity.
The boom in mobile usage is astounding. According to Cisco, mobile data traffic will double every year through 2014, increasing 39 times between 2009 and 2014, reaching 3.6 exabytes per month by 2014. Almost 66 percent of the world's mobile data traffic will be video by 2014. All this requires bandwidth. The wireless industry--now supported by the administration's National Broadband Plan, is looking to U.S. broadcasters to relinquish some of theirs.
Broadcasters, however, have no intention of giving it up without a fight. At the Hollywood Post Alliance's recent Tech Retreat, a panel of broadcasters made it clear that they're not sitting on extra, unused spectrum. FOX Technology Group SVP of DTV technologies Jim DeFilippas, who stressed that he was speaking his personal opinion, scoffed at the Internet. "It's sexy, but it has a half-life of 18 months whereas the TV set is an investment over the long term," he said.
And to the notion that broadcasters are "spectrum hogs?" "To that, I say bunk," DeFilippas said. "Broadcasters can deliver 1 million viewers per hertz and it scales infinitely, whereas they have LTE, which is using 10 megahertz for 150,000 simultaneous views. So broadcasters have a one-million-to-one efficiency ratio. We have to give due consideration to the [mobile] technology, but we must defend our right to the spectrum."
CBS Networks' VP of engineering Bob Seidel reported that they've looked into "alternative broadcast architectures" to improve spectrum efficiency in the TV bands." "But very little spectrum could be retrieved," he said. "Broadcast spectrum is fully utilized. Reclaiming broadcast spectrum in the major metro areas will not be possible."
BATTLE LINES BEING DRAWNIn the meantime, broadcasters have been busy creating their own mobile TV play. The Open Mobile Video Coalition was formed as "an alliance of U.S. commercial and public broadcasters formed to accelerate the development and rollout of mobile DTV products and services" and now includes 900 U.S. stations. Unlike the nearly-20 years it took to come up with an HDTV standard, the Advanced Television Systems Committee (ASTC) approved a Mobile DTV Standard in less than a year, finalized in October 2009.
Since then, Mobile DTV has been inching its way towards a national roll-out. In the beginning of 2010, the OMVC created a Washington DC Consumer Showcase, which built out a multichannel Mobile DTV system and tested it with 360 area consumers for first-hand feedback on the service. The OMVC also launched four model stations, two in Atlanta (WPXA-TV and WATL-TV) and Seattle (KONG-TV and KOMO-TV) for R&D into device interoperability. On the business side, broadcasters have formed Mobile DTV alliances: the Mobile500 Alliance and the Mobile Content Venture, a joint venture of 12 broadcasters including Fox, ION Television, NBC and Pearl Mobile DTV.
Initially, the U.S. broadcasters, telcos and the Consumer Electronics Association presented a united, peaceful front, asserting that their services were complementary and thus would co-exist. The broadcaster's mobile signal is ideal for mass audience events, such as the Super Bowl, State of the Union addresses and big news events, since the audience can scale infinitely. Just as with television, Mobile DTV is a one-to-many technology, whereas the telco signal is ideal for video-on-demand and other individualized content streams (including banking and retail).
But those warm and fuzzy moments of industry solidarity are over, something that became very evident at the Consumer Electronics Association's trade show, CES 2011. "Spectrum is the top priority of the FCC in 2011," said Genachowski in a keynote address there. "Mobile broadband technology is being adopted more quickly than any computer technology in history. While our appetite is limitless, spectrum is not. The coming spectrum crunch threatens our lead in mobile."
These words were music to the ears of the CE and wireless industries, which quickly called for broadcasters to give up spectrum, in what the government has said would be voluntary auction of spectrum. CE and wireless industry leaders have been more blunt, saying that broadcasters have had free spectrum for 60 years. CEA president Gary Shapiro echoed FCC chair Julius Genachowski Creative COW Magazine -- The In the Air Issue 11 a common belief in that industry that broadcasters are in fact "squatting" on the spectrum. They also point to the fact that the majority of Americans get their TV signal over cable or satellite, not over-the-air, as proof that broadcasters don't really need it.
(Broadcasters rebut this assertion, saying that, on a market-by-market basis, OTA reception can nearly top 20 percent.)
The National Association of Broadcasters is standing firm against a spectrum auction that is not completely voluntary. "NAB believes that broadcast innovation and broadband development are not mutually exclusive goals," the trade organization states on its website. "The finest communications system in the world requires both free, over-the-air broadcast television and high speed broadband services." Ultimately, Congress will decide on the fate of the spectrum auctions.
Behind the brouhaha over spectrum lies the issue that's germane to anyone engaged in creating, distributing and monetizing content. In an environment of over-the-top TV, mobile apps and 20-million Netflix subscribers, what is the future of creative content? Although TV viewing is up (a recent Nielsen report showed that people are watching an average of 35 hours a week), as smartphones and other mobile devices become dominant viewing screens, will networks and call-letter stations lose even more of their hegemony than they did in the 900-channel universe? The answer seems almost certainly to be yes.
Broadcasters are still searching for a business model that works for Mobile DTV, as they search for content that will draw eyeballs. Stations that are broadcasting a Mobile DTV signal are simply simulcasting their broadcast signal. At the same time, nearly every media outlet has an iPad or iPhone app, with an Android app not far behind.
CONTENT IS NOT ENOUGHDiscoverability in this new digital universe makes the old "900 channel world" look like a manicured park. Except for Apple, perhaps, no one can point to the real winners yet, although many signs point to traditional TV as a losing proposition. ROAM Consulting president Pete Putnam, in an address at the Hollywood Post Alliance's Tech Retreat, had his own takeaway from CES 2011. "TV prices have fallen through the floor," he said. "The television business is in the toilet. People want to buy tablets and smartphones, not TVs."
Creating winning content is not enough anymore. The current struggle over spectrum won't shut NBC's doors or put ABC out of business. But it may very well change how you do business. Smart showrunners -- such as those behind "House" and "Glee" -- are making sure their TV shows are in the app stores, online and feature content such as mobisodes and appisodes unique to those platforms.
Mobile DTV could still be a great thing but, while broadcasters figure out a way to produce new content or monetize existing content, it's not enough. Marketing has become an even more integral part of creating, distributing and making money. What's your digital strategy? Is your content available on smartphones and tablets? Going forward, these are just some of the questions that everyone in our industry needs to be asking…and answering.
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